Many companies and organizations are continuing to look for ways to reduce their internal cost of operations and overhead. Implementing LEAN manufacturing principles has become a very important concept and one that may help improve overall efficiency of operations, directly impacting bottom line results. This blog is written for those organizations.

February 2011

02/28/2011

Are you an owner, operator, or senior manager supporting the manufacturing community? If so, you won’t want to miss our upcoming Manufacturers Summit! Hosted by McKonly & Asbury and MANTEC with partner organization, the Harrisburg Regional Chamber and CREDC, please join us on Thursday, June 9th at the Radisson Penn Harris for an afternoon of insightful discussion centered on current matters impacting manufacturers in today’s economy.

Some of the topics that will be covered are:

Tax Credits for Manufacturers and a General Tax Update

Business Valuation – How Value is Determined and Items that Impact Value (i.e. LEAN)

State Update from a Local Representative

Discussion on the Six Next Generation Manufacturing Strategies

This summit will be held on Thursday, June 9, 2011 at the Radisson Penn Harris at 1150 Camp Hill Bypass in Camp Hill. Registration will begin at 12:30pm and will run from 1:00pm – 4:30pm. Then join us afterwards for a networking mixer from 4:30pm to 6:00pm. The cost to attend is $35. This fee includes admission to the summit and mixer, along with one drink ticket and appetizers provided at the mixer. A cash bar will also be available.

02/24/2011

A landmark study was released February15th showing that although manufacturing has faced challenges in recent years, it’s still Pennsylvania’s number one economic engine in terms of gross state product (GSP). It’s also the fourth largest provider of jobs – with a family-sustaining average yearly salary of $52,204.

Pennsylvania’s Industrial Resource Centers (IRCs), the study’s lead researcher Dr. Edward Hill, and manufacturers spoke at the state Capitol to reveal major findings and conclusions. Speakers called on lawmakers to help the industry grow through policy changes and programming including: reducing the Corporate Net Income (CNI) Tax, and strategic state investment in areas such as improved management practices, new product development, and workforce training.

The study, “Pennsylvania’s True Commonwealth: The State of Manufacturing – Challenges and Opportunities,” was commissioned by the IRCs – a network of seven non-profits dedicated to assisting small and mid-sized manufacturers with growth projects. Dr. Hill and his research team compiled and analyzed extensive quantitative data, as well as results from focus groups with 70 manufacturing CEOs in order to pinpoint best management practices and ways the state can help increase competitiveness.

Dr. Hill explained that manufacturers in the past decade have faced the Great Recession, an increasingly global economy, and a massively undervalued Chinese currency. In response to the changing markets, companies that adapted and invested in employee engagement and workforce training have shown an incredible resilience.

Challenges have hit manufacturers differently based on the size of their workforce. Between 2006 and 2008, the largest firms shed more than 16 percent of their jobs. But the small (less than 100 employees) were able to stay relatively the same, and mid-sized firms (between 250 – 499 employees) actually added jobs.

IRC Network president Barry Miller, of Philadelphia, announced that manufacturing has the highest multipliers of any industry in the state; in terms of jobs, income and value added. “As manufacturing grows, many other industries – like tech, retail and service – also get a boost,” said Miller. “This means policymakers should look toward expanding our manufacturing base as one of the quickest ways to jumpstart the economy.”

Manufacturing has an impact on the entire state, but has more of an effect on economies in rural counties: accounting for 23 percent of GSP and 16 percent of all employment in 2008.

Productivity (gross state product per employee) in 2008 was $27,000 higher for Pennsylvania manufacturers than for non-manufacturers. The gap may be explained by improved capital and management practices among manufacturing companies

More than 60 percent of the patents issued from 2001 through 2010 to Pennsylvania companies and universities went to manufacturing companies.

For more information on this press conference and the study, please contact the LEAN Accountants of McKonly and Asbury, LLP or visit our IRC partner MANTEC at www.mantec.org.

02/17/2011

Don't assume you have to expand your company to increase profits. Extra cash is probably sitting right under your nose.

A thorough profit audit can uncover those dollars in every department of your company.

Here are five ideas to get you started:

1. If you're interested in borrowing money, it's important to show your banker a marketing plan. But have you considered showing a potential lender a profit plan as well?

Think of the extra capital you can borrow by showing your lender a realistic picture of your long-term profit potential.

2. Don't rely solely on traditional sales goals that are based on the previous year's performance. This encourages your sales force to coast when those benchmarks are achieved. Instead, compile some good market projections and set a higher goal.

3. Don't confine sales to the sales department. Train all your employees to spot leads around town. If the referrals result in extra sales, award those employees with a small piece of the sales commissions.

4. If you ask 10 employees what your company does best, you'll probably get a variety of answers. Conduct a few meetings and narrow it down. You'll end up strengthening the company's core operations and boosting the bottom line.

5. What products or services should you eliminate? That's a painful question for many business. Most likely, you and your top managers already know the answer. Get it out in the open so you can start focusing on more profitable activities.

To learn more about how to perform a profit audit, please contact the LEAN Accountants of McKonly and Asbury, LLP.

02/10/2011

The great Green Bay Packers football coach Vince Lombardi once said “Perfection is not attainable, but, if we chase perfection, we can catch EXCELLENCE.” That is the core concept of Performance Driven Management: Continuous improvement and the measurement of that improvement.

I am sure you have heard of the saying “What Gets Measured Gets Done.” The goal of Performance Driven Management is more than just this. Performance Driven Management focuses on continuous improvement by measuring results, analyzing the feedback to improve performance and repeating those results continuously and institutionalizing the process.

In order to track performance, most businesses use Key Performance Indicators (KPI’s) or metrics that measure important statics or variables of a business and its industry. Those KPI’s or metrics usually center around a process, service or function within a production line that track a critical time, quality, turnover, placement or some similar operating result.

Performance Driven Management is more than just tracking key variables, KPI’s or metrics, it is a management and team philosophy on how to operate, monitor operating performance and continuously improve performance of operations and function within a production line or even activities outside of manufacturing.

02/03/2011

November U.S. manufacturing technology consumption totaled $318.18 million, according to AMTDA, the American Machine Tool Distributors’ Association, and AMT - The Association For Manufacturing Technology. This total, as reported by companies participating in the USMTC program, was down 17.7% from October but up 81.1% when compared with the total of $175.68 million reported for November 2009. With a year-to-date total of $2,792.58 million, 2010 is up 82.7% compared with 2009.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

The United States Manufacturing Technology Consumption (USMTC) report, jointly compiled by the two trade associations representing the production and distribution of manufacturing technology, provides regional and national U.S. consumption data of domestic and imported machine tools and related equipment. Analysis of manufacturing technology consumption provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.

U.S. manufacturing technology consumption is also reported on a regional basis for five geographic breakdowns of the United States.